Corn (March)
Yesterday’s Close: March corn futures finished yesterday’s session up 1 ¼ cents, trading in a range of 3 ¼ cents.
Fundamentals: Weekly export inspections came in at 901,000 metric tons, within the range of expectations. Weather in South America has been friendly, helping the prospects of higher yield and production numbers. The big-ticket this week will be Friday’s USDA report, covering production/stocks and supply/demand. We will have estimates out for you by midweek. We would not be surprised to see some position squaring as the week progresses.
Technicals: Surely, we sound like a broken record now, as the market continues to trade within a well-defined range. Support and resistance pockets have remained intact for the better part of the last 3 weeks. We see that support coming in from 375 ¾-378 ½. On the resistance side of things, 382-384 ½. A breakout or breakdown opens the door for an additional 5 cents in short order.
Bias: Bullish
Resistance: 382-384 ½**, 388-390 ½****
Support: 375 ¾-378 ½***, 371 ¾-372 ½****
Soybeans (March)
Yesterday’s Close: March soybean futures finished yesterday’s session up 1 ½ cents, trading in a range of 8 ¼ cents.
Fundamentals: Weekly export inspections came in at 976,000 metric tons, within the range of expectations. Weather in South America has been friendly, helping produce good yields and an early harvest in some areas. Brazil is estimated roughly 19% complete, ahead of the 5-year average pace of 6%. The big-ticket this week will be Friday’s USDA report, covering production/stocks and supply/demand. We will have estimates out for you by midweek. We would not be surprised to see some position squaring as the week progresses.
Technicals: Not much has changed on the technical landscape over the last 24 hours. The market continues to hover around the 200-day moving average and key retracement from 919-921 ¾, a pivot pocket for us. First meaningful support comes in from 910 ¾-913 ¼. If the market breaks below here, we could see prices work towards 897-899 ½. This is a pocket where we would want to be aggressive buyers on the first test.
Bias: Bullish
Resistance: 931 ¼**, 941-947****
Pivot: 919-921 ¾
Support: 910 ¾-913 ¼***, 897-899 ½****
Wheat (March)
Yesterday’s Close: March wheat futures finished yesterday’s session up ¾ of a cent, trading in a range of 7 ¾ cents.
Fundamentals: Weekly export inspections came in at 440,000 metric tons, this was within the range of expectations. Forecast are calling for another round of cold temperatures through the Midwest (duh, it’s winter) which has some concerned. As with corn and beans, Friday’s USDA report will be the “main event” this week. We will have estimates for you in the coming days.
Technicals: The market tested and held our technical resistance pocket to a T yesterday, we had defined that as 529-530. Another test to this pocket could be the straw that breaks the camel’s back. If the bulls can chew through resistance, with conviction, we could see a run back above 540 in a short amount of time. On the support side of things, 518 ¼-521 ¼ is the pocket that the bulls want to defend.
Bias: Bullish
Resistance: 529-530***, 537 ¾-541 ¾****
Support: 518 ¼-521 ¼***, 508-510**, 499-501 ¼****
E-mini S&P (March)
Yesterday’s close: Settled at 2721.25, up 17.00
Fundamentals: U.S benchmarks continue their march higher and the S&P is nearly 1% from completely erasing December’s loss (December ES settled November 30th at 2758.25). There has been an incredible range between now and then but if you take a step back, not a lot has changed; first quarter growth has likely been slower, as expected, a government shutdown still looms and there has been zero substance on U.S and China trade. Earnings have been overall better than the lower expectations which has kept market participants intrigued and less cautious. The largest storyline is the Fed and their U-turn between the December and January meetings. We believe their rhetoric last week dovishly overshot the market conditions and expectations. This ups the ante on a list of speakers this week. Last night, Cleveland Fed President Mester supported the Fed’s policy comments but added the committee will have to raise rates if the economy continues to do well. Tomorrow, Fed Governor Quarles speaks and on Thursday Fed Vice Chair Clarida and St. Louis Fed President Bullard each speak. Late last week, the CME FedWatch Tool showed a zero percent probability the Fed will hike in March, this morning it sits at 3.9%.
All of these storylines will be present later tonight when President Trump delivers his State of the Union to Congress but none more than the standoff over the border wall. The event is set to begin at 8:00 pm CT.
Services PMI and Markit Composite are due at 8:45 am CT. The more closely watched ISM Non-Manufacturing read is due at 9:00 am CT. On the earnings front, B.P is up more than 3% after delivering this morning. Disney headlines after the bell.
Technicals: Price action is elevated and trading with a melt-up mentality. Participants are clinging to longs, diminishing volatility. For the S&P the bulls will maintain a clear upper hand with price action above 2719.50-2721.25 which aligns with yesterday’s settlement. In the NQ, this level comes in at 6937.50-6955.50. A move below each of these levels should open the door for a pullback into the battleground from Friday and Monday which is now support. There is strong overhead resistance in the S&P at 2743-2751.25, this aligns a range reversal with the 200-day moving average; a test this area would complete the range extension from January 18th to 23rd.
Bias: Neutral
Resistance: 2743-2751.25***
Pivot: 2719.50-2721.25
Support: 2706-2709.75**, 2691.75-2695**, 2672.50-2677.75***,
NQ (March)
Resistance: 6999.75***, 7058.25**
Pivot: 6937.50-6955.50
Support: 6914.75***, 6858.25-6877.75**, 6810.50-6837.25***
Crude Oil (March)
Yesterday’s close: Settled at 54.56, down 0.70
Fundamentals: Crude ping-ponged between strong resistance and support yesterday to settle right in the middle. Inventory data is quickly coming into the picture with not a lot of fresh news flow outside of that coming from Russia. Supporting prices yesterday was reports that Russia’s production in January fell below expectations following the OPEC+ cut deal. Although the sellers defended strong resistance in the $55 ballpark again this morning, a dip aligned with a number of comments from Russian Oil giant Rosneft after earnings. One in particular was that they do not expect a decline in Oil output at its projects in Venezuela. Additionally, they said there are different expectations for OPEC and non-OPEC according to any deal in place. It appears that Rosneft has until July 1st to reduce production 90,000 bpd, 19,000 of which has already been done. We look at this from the perspective, Rosneft may slow any cuts now that Brent is handily above $60.
Technicals: Price action is battling at our pivot which comes in at 54.26-54.52 today; below here the bears can attempt to gain an edge, however, above here the bulls hold the cards. Yesterday’s sharp drop early tested right into support that aligned with Friday’s low which marks a low coming in at this area for four straight sessions; this has now become a line in the sand to hold price action elevated.
Bias: Bearish/Neutral
Resistance: 55.51-55.55***
Pivot: 54.26-54.52
Support: 53.01-53.37**, 51.33-51.50**, 50.51-50.96***
Gold (April)
Yesterday’s close: Settled at 1319.3, down 2.8
Fundamentals: Gold is consolidating in a healthy manner after running $50 since January 21st. Over the next 24-48 hours, a deluge of data and Fed speak will be absolutely crucial for the metal. Furthermore, we can expect volatility in the Dollar with tonight’s State of the Union. ISM Non-Manufacturing is due today at 9:00 am CT and tomorrow we begin to see some of the government shutdown cancelled releases trickle out. In the immediate-term Gold will see volatility due to a confirmation or denial of the Fed’s newly more dovish rhetoric. Regardless of such, we believe there are bigger forces behind this, and the best has yet to come.
Technicals: The metal has struggled to regain first key resistance which was our pivot level at 1321.7-1323.4. Although the bulls have lost some of the immediate-term momentum, a move back above here will help them regain such. Strong support sits below, and our first key level held yesterday with a higher low trading through today. Still, buyers must be prepared for 1306.3-1306.5 in order to back the truck up at this level.
Bias: Bullish/Neutral
Resistance: 1321.7-1323.4**, 1337**
Support: 1312.1**, 1306.3-1306.5***, 1300.5**, 1281.5-1284.5***
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